Comments by Sungbae An, on The Effects of U.S. Trade War Tariff Exemptions on U.S. Trade with China and Asia

Sungbae An: The work by Swenson highlights how the nuanced implementation of policies can affect firms’ decisions through uncertainty channels. It specifically examines the temporary exemption from tariffs at a time of heightened uncertainty about the impact of the trade war tariffs between the United States and China. For firms, the uncertainty of whether they would qualify for the exemption was high, and even with one extension, the maximum period of exemption was only two years, requiring a medium-term shift in sourcing to ensure a stable supply chain. Using fine-grained HS10-level data, this study provides empirically robust results on the process of applying for and receiving tariff exemptions and the changes in the regional import structure of the United States because of the introduction of these programs. While much of the literature on the U.S.–China trade war focuses on the first-order effects of tariff hikes, this study is unique in...